If ever there was a growth industry in 2020, it’s fraud. According to Experian, the cost of fraud in 2020 was $1.2 billion! That’s an epic number of people and businesses impacted. And that’s not all, because with technology, the complexity of fraud becomes greater.
It’ll be no surprise to anyone reading this article that this is going to be another hot topic to watch in 2021, and features in the Financial Ombudsman Services’ top 5 of trends to watch out for 2021.
Let’s have a quick look at what fraud can look like and how it can affect a business when it comes to complaints.
It can be dizzying to even contemplate the number of ways fraud can be committed within our industry alone. Everything from insurance fraud, through to banking fraud and into SIPP pension funds being syphoned off into fake investments in rubber tree plantations. It’s a vast array of scams and fraud, all designed to fleece customers and, by implication, businesses of their hard earned cash.
This means businesses need to be alive to the changing landscape of fraud and scams that is being seen in complaints. It includes monitoring not just the Financial Ombudsman Service for news of what it’s seeing, but also the FCA, which lists the types of scams they are aware of. Whilst helpful, that’s not enough in itself, because while this tells you some of the information it doesn’t show how you can help yourself as a business when it comes to these various types of fraud, and the complaints that can stem from it.
None of these types of cases are straightforward but, what I can say, when it comes to products and advice, you need to make sure you’ve stuck to the terms and conditions and the rules that cover your bit of the industry or your actions. If you’ve not done this, then you can expect the Financial Ombudsman Service to uphold the complaint.
On the flip side, it will also consider the actions of the customer and if they’ve done something that looks odd, i.e. just isn’t something that would be typical for a customer, In these situations, then you can expect the Ombudsman to pick the customer up on this. What sort of thing am I talking about here? Well, a fairly simple example would be where a business warns a customer against the actions they are going to take, but the customer continues anyway. In that instance, the business has done as much as is reasonable and so the Ombudsman can’t expect it to have done more.
However, given the complexity of this area and that it’s a growth industry, there is a responsibility on the business to make sure it’s knowledge of fraud and scams is kept up to date and that it keeps tabs on what the Ombudsman and the Regulator are seeing.
Overlaying this should be a process where the business monitors its own complaints trends to ensure that mistakes aren’t repeated, otherwise it won’t just be seeing an increase on its complaints, it’ll also mean seeing more compensation disappearing out the door too!
RegTech is a relatively new word but one that is key to the long-term success of managing compliance issues, complaints included, in the future. Regtech is the collective name, used by the FCA, to describe software solutions that manage compliance related processes more effectively, so increasing the probability of firms’ complying with the regulation, and at a lower cost.
Worksmart has picked up the ACQ ‘Complaints Management Solutions Provider of the Year’ award for the last two years for their complaints and feedback management system, Caresmart.
Caresmart has three key features that directly address the issues raised above:
- RCA: Caresmart provides detailed root-cause analysis and organisational learning identification, allowing trends to be picked up and monitored. These can all be reported on from within the system via the standard MI pack available.
- MI: Caresmart also provides graphical management information and regulatory reports in an in real time.
- Configuration: Specific complaint types or product types (fraud related) can be configured within the system to automatically notify your Fraud team via email, so they have an immediate notification of fraud related complaints. Reports can also be set-up and automatically emailed to the Fraud team on a daily, weekly or monthly basis.
In the meantime, if you would like to know more about how Caresmart could help transform your complaints processes, contact our friendly and knowledgeable team on: 01908 613613 or email us on: firstname.lastname@example.org